Procurement success in 2023 with our Strategy Course

RFI VS RFP — Everything You Should Know

Both the request for information (RFI) and the request for proposal (RFP) are often confused with one another. However, they have their own use, especially in business. 

This article will discuss what RFI and RFP are. We will also differentiate them from one another and tell you their advantages and disadvantages when using one of them. 

Once you are finished reading this article, you will have an in-depth understanding of both RFI and RFP. Thus, this article will allow you to clear the confusion regarding their use. Additionally, you will also know which of them is more appropriate to use in some situations in your business. 

Defining RFI

For you to fully grasp their difference, we will discuss their definition first. A Request for information (RFI) is a method of gathering information from multiple suppliers before the procurement manager starts to source products or services. 

The RFI is often applied once you have gathered multiple suppliers but you do not have any information about them. The procurement manager will collect information about the suppliers to find which among them suits the company better to be their supplier. 

Therefore, the RFI will be sent to the potential suppliers. Once the data has been collated, the procurement manager will assess and start discussing with the suppliers. After this, the procurement manager will finally select among the potential suppliers. 

The Meaning of RFP

A request for proposal (RFP) is a document that contains the description of the project and solicits bids from potential contractors to complete it. This document defines the project, goals, and the organization that sponsors it and outlines the bidding process and contract terms. 

Also, the RFP is sometimes called a request for procurement as the proposal is about procuring the right materials for a project. It is the procurement phase where the procurement manager puts the details of the project or task to acquire the important materials or services. 

RFP is commonly used for head-starting procurement projects and is usually used by governments. Thus, they are familiar with these kinds of requests for procurement. It is the job of the procurement manager to assess the bids, the background of the company that wants to bid for the project, and know if the potential companies that bid can undertake the project. 

Difference Between RFI and RFP

Now that we know both of their meanings, let us now differentiate them for you to be able to erase the confusion regarding RFI and RFP.

Request For Information
RFI is a document used by companies that do not understand the marketplace they are about to enter.
RFI is also used when a project owner has a problem that needs fixing but does not know the best way to address it. This is to gather possible remedies from contractors.
RFI is often informal and does not take long to respond to.
The RFI usually contains only questions for a supplier to answer.
Request For Proposal
RFP is a document that asks suppliers to propose solutions to business requirements.
The RFP is commonly what follows an RFI.
Unlike the RFI, the submission of an RFP is more formal.
RFP commonly contains a pricing component.

Ultimate Supplier Plotting Checklist 2023

Advantages and Disadvantages of RFI

Advantages
One of the advantages of RFI is that the company gets an opportunity to know the marketplace.
The RFI lets you identify which of your potential suppliers take your business seriously.
You can collect product information which will allow you to create realistic requirements in your RFP.
RFI allows you to acquire a shortlist of potential suppliers that you would like to invite to an RFP.
Disadvantages
A major disadvantage of sending an RFI is that suppliers may see it as something potential customers are not very serious about. Thus, they may not put too much effort into their response.
Another disadvantage is that suppliers may not send information if they do not see real commitment from you.
Launching an RFI extends the purchasing process as companies need to factor in the time to assess the RFIs.
Many companies are having difficulties in defining real commitment as it depends from business to business. Thus, many of them skip the RFI process.

Advantages and Disadvantages of RFP

Advantages
The RFP procurement process limits the interaction between you and the suppliers prior to their submissions and any vendor is allowed to submit a proposal. Thus, there is less chance of bias.
Having an RFP ensures that the evaluation committee will not be influenced by other information that is not important to compare one supplier’s platform to another.
The RFP can potentially identify new suppliers that suit better for your company.
Disadvantages
RFP can be a lengthy process and has the potential to disqualify well-suited suppliers due to the specific requirements in the RFP. Additionally, some find it expensive, which is why suppliers will not submit a proposal.
Although the RFP creates a level playing field, it prohibits relationship-building due to the fact that the evaluation committee is prohibited from speaking to suppliers and the only communication allowed is the official ones.
The RFP may block the chance of gaining potential important supplier benefits.

Frequentlyasked questions

+ What is RFI?

It is a document that is used to gather information from multiple suppliers before the procurement manager starts to source products or services.

+ What is RFP?

It is a document that contains the description of the project and solicits bids from potential contractors to complete it.

+ What is the main difference between RFI and RFP?

RFI is usually used when companies want to get information about their potential suppliers. On the other hand, RFP is used when companies want to ask for solutions to business requirements. 

Negotiation Course For Procurement Professionals

You'll get a certificate after completing the course

Rated 9.2/10 ★★★★★

Our clients work at
We Educate Procurement Professionals – Procurement Tactics
Share This